This is a Golden Age for health care. But at the same time new treatments and cures are being developed, Americans are properly concerned about costs. How can the health care system continue to innovate while providing value?
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Our NewsletterIssue No. 60: Dozens of New Drugs Approved Last Year: What All the Innovation Is Telling UsWhen it comes to pharmaceuticals, the focus of policy makers, the media, academics, and advocacy groups tends to be on who’s paying how much. They often neglect what Americans are paying it for -- that is, the drugs themselves. As a result, too many people risk missing the big picture, which is that Americans are gaining access to more and more innovative medicines that are granting them longer and better lives. In 2019, U.S. Food & Drug Administration (FDA) approved 48 new medicines, bringing the total for the past three years to 153. That is 25% more than for any such period since 1938, when President Roosevelt signed the Food, Drug and Cosmetic Act, and the modern era of pharmaceutical regulation began. The record for approvals was set in 2018; last year’s total was the second-highest ever. In regulatory jargon, these approved drugs are called “new molecular entities,” or NMEs. As the FDA says on its website: “Many of these products contain active moieties that have not been approved by FDA previously, either as a single ingredient drug or as part of a combination product; these products frequently provide important new therapies for patients.” (A “moiety,” by the way, is part of a molecule that often gets its own name and is found within other molecules, too.”) What the NME total does not include is also significant. The list of 48 “does not contain vaccines, allergenic products, blood and blood products, plasma derivatives and gene therapy products” or other biological products, which are often the most advanced medicines. (Last year’s 48, for example, does not include the approval in May of a revolutionary genetic treatment for a terrible disease afflicting young children – more on that below.) The list also does not include approvals for new indications – or other applications for an already-approved drug. For example, the drug Keytruda, originally approved in 2014 for advanced melanoma (skin cancer), has since been granted FDA approval for more than 20 indications. Seven of those approvals came in 2019 (and one so far in 2020), including for certain kinds of cancers of the lungs and esophagus. Nor does the total include generic drugs, or copies of patented medicines. For fiscal year 2019, the FDA approved an incredible 1,171 generics, breaking the previous year’s record by 21%. In all, more than 3,000 generics have been approved since Oct. 1, 2016. The flood of generics is, in large part, the result of a streamlining of the approval process under FDA Commissioner Scott Gottlieb, and it’s a key reason that the price of the average prescription has leveled off and even declined under the Trump Administration. While the volume of FDA approvals has been encouraging, drug R&D has to earn enough of a return on investment to keep the innovations coming. Remember that Investments that began decades ago produced the drugs approved in 2019. Today, there are threats from such proposals as pricing U.S. drugs – the source of most global innovation – according to an index of prices set by governments in foreign countries. We’ll explain some of the dangers of this International Pricing Index at the end of this newsletter. Read More Here. |
What Others Are Saying"The anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs." "Even if pharmaceutical spending were rising as a share of total health care spending, but that rise was due to pharmaceutical investments driving down expenditures in other health care areas (e.g. a reduced need for more expensive surgeries), then it would still be inaccurate to argue that pharmaceutical spending is driving overall health care inflation." |
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Cost-of-Health-Care News (CHCN) was launched on November 30, 2016, with the aim of providing news and analysis regarding a critical public-policy concern: the costs and pricing of health care. CHCN is published by EAH Strategies, headquartered in Grand Rapids, Mich. CHCN is supported by Pfizer.